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Margarita [4]
3 years ago
15

"Choate International plans to issue $15 million in 10-year bonds. They believe they can afford to pay $1,150,000 in interest to

bondholders each year. Which annual interest rate should they use for their bonds?
Business
1 answer:
Rudiy273 years ago
4 0

Answer:

They should use interest rate of 7.7%

Explanation:

The rate (let's call it r) should be that the annual interest of the $15,000,000 that they borrow through isssuing bond is $1,150,000

Then 15*10^6 * r = 1,150,000 => r = (1.15*10^6)/(15*10^6) = 0.077 or 7.7%

<u>Note:</u> $1,150,000 is the annual amount they could set aside for paying interest, so they should use 7.7%. If it's lower than what market requires they will have to sell the bond at a discount. If it's higher than is required they the bond would be bought at a higher price than par-value.

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Though many aspects of private life and community life differ from culture to culture, in most developed countries business is c
Llana [10]

Answer:

Though many aspects of private life and community life differ from culture to culture, in most developed countries business is conducted in more or less the same way?

Successful businesses in developed countries are conducted in more better ways as a result of active policies that allows business to grow also consumers actions at the market are always top-notch which enables suppliers to give more output in order to make more profit  

Explanation:

5 0
4 years ago
You purchase a new car for $33,333. What is the outstanding balance on the loan after you make the second payment if you have a
GenaCL600 [577]

Answer:

$32,419

Explanation:

I prepared an amortization schedule using an excel spreadsheet. The monthly payment is $673.32:

year        beginning  scheduled  principal     interest ending

              balance             payment                                                 balance

1        $33,333         $673.32        $456     $218       $32,877 .45

2        $32,877         $673.32        $459     $215       $32,418.91

The outstanding balance after the second payment = $32,418.91 ≈ $32,419

6 0
3 years ago
12. The stock that is selling for GH¢12 today is expected to pay GH¢ 1 next year, GH¢2 the year after and GH¢ 3 the following ye
Westkost [7]

The expected share price after the third dividend is GH¢ 20.22

What is stock price?

The stock price can be determined as the present value of future dividends, years 1-3 and the present value of all dividends beyond year 3 which is known as the terminal value(i.e. the unknown selling price after the third dividend as required in this case)

The terminal value is the present value of future dividends after 3 years which needs to be discounted 3 years backward in the process of computing share price

Share price=12

Year 1 dividend=1

Year 2 dividend=2

Year 3 dividend=3

Terminal value=unknown (assume it is X)

discount rate=32%

Each future dividend can be discounted using the present value formula of a single cash flow shown below:

PV=FV/(1+r)^N

FV=each future cash flow/dividends

r=discount rate=32%

N=the year of dividends, 1 for year 1, 2 for year 2

12=1/(1+32%)^1+2/(1+32%)^2+3/(1+32%)^3+X/(1+32%)^3

12=3.20978378829618+X/(1+32%)^3

12-3.20978378829618=X/(1+32%)^3

(12-3.20978378829618)*(1+32%)^3=X

X=(12-3.20978378829618)*(1+32%)^3

X=GH¢ 20.22

Find out more on terminal value on:brainly.com/question/25818989

#SPJ1

6 0
2 years ago
Suppose that consumers would like to purchase 10 million dvds but only 5 million are available. in order for the market to coord
slavikrds [6]

Answer: in the given hypothetical statement above in order for the market to coordinate the demand and supply for dvds, the price of dvds will have to increase. When the price of dvds increase the supply will increase too, because the suppliers will now have a greater profit margin than before. On the other hand, the demand will decrease because of the higher prices and in this way the demand and supply curves will reach an equilibrium.

5 0
3 years ago
Emily is deciding whether to buy the same designer jacket her friends have. The jacket is much more expensive than a similar one
zmey [24]

Answer: the right answers are

Is advertising influencing her?

What are her motivations?

Has she compared prices?

Is she buying at the right time?

Explanation:

took the test

5 0
3 years ago
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